Federal Reports

The Office of Special Reviews substantiated allegations that Peter Shelby, while serving as VA’s Assistant Secretary for Human Resources and Administration (HR&A), improperly steered a $5 million contract for the benefit of individuals with whom he had a personal relationship. The OIG determined that VA could not use the contract services, resulting entirely in waste. In February 2018, VA awarded a one-year contract to a Service-Disabled Veteran-Owned Small Business (SDVOSB) (the Small Business) that provides leadership development training. The contract also included talent assessment services for evaluating whether to hire or promote candidates. When the contract concluded in August 2019, it became evident that VA had purchased services far in excess of what it could use. VA used only 232 of the 17,000 one-year training licenses it purchased for $3.8 million and VA received no value whatsoever for the talent assessment services because required privacy and security certifications were not obtained. The OIG determined that this waste occurred as a direct result of Mr. Shelby’s misuse of his official position by directing his senior staff to arrange for the award of this contract to the Small Business on a sole-source basis (i.e., without competition). The OIG determined that although there was statutory authority to contract with SDVOSBs, use of VA’s sole source authority in this case was not supported by an adequate justification as required by VA policy and regulation. Mr. Shelby resigned from federal service in July 2018 after learning that he had been recommended for possible removal for reasons unrelated to this contract. The OIG makes eight recommendations for process improvements spotlighted by this investigation and for VA to consider whether any administrative action should be taken for certain employees. VA concurred with all eight recommendations.

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